A $660,000 townhome in Richmond Hill was purchased with a down payment of 20% of the amount. A 20-year mortgage was taken for the balance. The negotiated fixed interest rate was 4.5% compounded semi-annually for a three-year term with repayments made at the end of every month. a. What is the size of the monthly payment? $0 00 Round to the nearest cent b. What was the principal balance at the end of the three-year term? $0.00 Round to the nearest cent c. By how much did the amortization period shorten if the size of the periodic payments were increased by 15% starting from the 37th payment? Assume the same interest rate. 0 months
A $660,000 townhome in Richmond Hill was purchased with a down payment of 20% of the amount. A 20-year mortgage was taken for the balance. The negotiated fixed interest rate was 4.5% compounded semi-annually for a three-year term with repayments made at the end of every month. a. What is the size of the monthly payment? $0 00 Round to the nearest cent b. What was the principal balance at the end of the three-year term? $0.00 Round to the nearest cent c. By how much did the amortization period shorten if the size of the periodic payments were increased by 15% starting from the 37th payment? Assume the same interest rate. 0 months
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Concept explainers
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
Question
Transcribed Image Text:A $660,000 townhome in Richmond Hill was purchased with a down payment of 20% of
the amount. A 20-year mortgage was taken for the balance. The negotiated fixed
interest rate was 4.5% compounded semi-annually for a three-year term with
repayments made at the end of every month.
a. What is the size of the monthly payment?
$0.00
Round to the nearest cent
b. What was the principal balance at the end of the three-year term?
$0.00
Round to the nearest cent
c. By how much did the amortization period shorten if the size of the periodic
payments were increased by 15% starting from the 37th payment? Assume the same
interest rate.
0 months
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